1 State of Arkansas

2 87th General Assembly

3 Fiscal Session, 2010 HCR 1006
4
5 By: Representative Wills
6
7
8 HOUSE CONCURRENT RESOLUTION
9 TO AUTHORIZE THE INTRODUCTION OF A
10 NONAPPROPRIATION BILL TO AMEND THE ARKANSAS
11 SCHOLARSHIP LOTTERY ACT, ARKANSAS CODE 23-115-
12 101 ET SEQ. AND 6-85-201 ET SEQ., AND OTHER
13 ARKANSAS CODE SECTIONS RELATING TO THE
14 ADMINISTRATION OF THE ARKANSAS ACADEMIC CHALLENGE
15 SCHOLARSHIP PROGRAM, PART 2; TO REQUIRE THE
16 ARKANSAS LOTTERY COMMISSION TO WITHHOLD STATE
17 INCOME TAX FROM LOTTERY PRIZE WINNINGS; AND FOR
18 OTHER PURPOSES.
19
20 Subtitle
21 TO AUTHORIZE THE INTRODUCTION OF A
22 NONAPPROPRIATION BILL TO AMEND THE
23 ARKANSAS SCHOLARSHIP LOTTERY ACT AND
24 REQUIRE THE ARKANSAS LOTTERY COMMISSION
25 TO WITHHOLD STATE INCOME TAX FROM
26 LOTTERY WINNINGS.
27
28
29 BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES OF THE EIGHTY-SEVENTH GENERAL
30 ASSEMBLY OF THE STATE OF ARKANSAS, THE SENATE CONCURRING THEREIN:
31
32 That Representative Wills is authorized to introduce a bill which as
33 introduced will read substantially as follows:
34
35
36

*CLR305* 02-04-2010 17:10 CLR305

 HCR1006

1 "For An Act To Be Entitled

2 AN ACT TO AMEND THE ARKANSAS SCHOLARSHIP LOTTERY ACT, ARKANSAS CODE 6-85-
3 201 ET SEQ. AND 23-115-101 ET SEQ.; TO AMEND OTHER ARKANSAS CODE PROVISIONS
4 RELATING TO THE ADMINISTRATION OF THE ARKANSAS ACADEMIC CHALLENGE
5 SCHOLARSHIP, PART 2; TO PROVIDE FOR THE WITHHOLDING OF STATE INCOME TAX FROM
6 LOTTERY PRIZE WINNINGS UNDER THE ARKANSAS SCHOLARSHIP LOTTERY ACT; AND FOR
7 OTHER PURPOSES.
8
9 Subtitle
10 TO AMEND THE ARKANSAS SCHOLARSHIP
11 LOTTERY ACT; AND TO PROVIDE FOR STATE
12 INCOME TAX WITHHOLDING FROM LOTTERY
13 PRIZE WINNINGS.
14
15
16 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
17
18 SECTION 1. Arkansas Code 6-85-204(5) (17), concerning definitions
19 used in the Arkansas Academic Challenge Scholarship Program Part 2, is
20 amended to read as follows:
21 (5) "Continuously enrolled" means:
22 (A) For a traditional student, he or she completes at an
23 approved institution of higher education twenty-seven (27) semester hours in
24 the first academic year as a recipient and completes thirty (30) semester
25 hours each academic year thereafter, not including any summer term;
26 (B) For a full-time nontraditional student or a current
27 achiever student, he or she completes at an approved institution of higher
28 education at least fifteen (15) semester hours of courses in consecutive
29 semesters, not including any summer term; and
30 (C) For a part-time nontraditional student, he or she
31 completes at an approved institution of higher education at least six (6)
32 semester hours of courses in consecutive semesters, not including any summer
33 term;
34 (6) "Current achiever student" means a student:
35 (A) Who meets the requirements of 6-85-209; and
36 (B) Is not a traditional student or a nontraditional

2 02-04-2010 17:10 CLR305

 HCR1006

1 student.
2 (5)(7) End-of-course assessment means an examination taken at
3 the completion of a course of study to determine whether a student
4 demonstrates attainment of the knowledge and skills necessary for mastery of
5 that subject;
6 (6)(8) General Educational Development test means a test
7 measuring the knowledge and skills usually learned in high school that is
8 administered by a state-approved institution or organization;
9 (7)(9) "High school grade point average" means the numbered
10 grade average on a students high school transcript calculated:
11 (A) For a traditional student, using the first seven (7)
12 of the last eight (8) semesters the student completed prior to graduating
13 high school; or
14 (B) For a nontraditional student, using the last eight (8)
15 semesters the student completed before graduating high school;
16 (C) Recognized by the United States Department of
17 Education for financial aid purposes;
18 (8)(10) Lawful permanent resident means a non-United States
19 citizen who resides in the United States under a legally recognized and
20 lawfully recorded permanent residence and who may receive state public
21 benefits under 8 U.S.C. 1622;
22 (9)(11) Net proceeds from the state lottery means lottery
23 proceeds for one (1) fiscal year less the operating expenses, as defined in
24 23-115-103 for the fiscal year;
25 (10)(12) Nonlottery state educational resources means the
26 funding available for state-supported scholarships and grants for students
27 enrolled in two-year and four-year institutions of higher postsecondary
28 education in this state that:
29 (A) The General Assembly makes available from general
30 revenue to the Higher Education Grants Fund Account without consideration of
31 the availability of proceeds from the state lottery; and
32 (B) The Department of Finance and Administration estimates
33 is available for distribution to the Higher Education Grants Fund Account
34 during a fiscal year from the Educational Excellence Trust Fund;
35 (11)(13) Nontraditional student means a student who is not a
36 traditional student or a current achiever student;

3 02-04-2010 17:10 CLR305

 HCR1006

1 (12)(14) Personally identifiable student data means any

2 information that, alone or in combination with other available information,
3 is linked or linkable to a specific student that would allow a reasonable
4 person in the student's school community to identify the student with
5 reasonable certainty;
6 (13)(15) Postsecondary grade point average means the
7 cumulative numbered grade average for college credit courses as calculated
8 using a 4.0 scale;
9 (14)(16) Qualified certificate program means a program that is:
10 (A) Offered That is offered by an approved institution of
11 higher education; and
12 (B) Shorter in duration than an associate degree for For
13 which credit hours are awarded that are creditable toward an associate degree
14 or baccalaureate degree; and
15 (15)(17) Recipient means an applicant awarded a scholarship
16 funded through the program;
17 (16)(18) State-supported student financial assistance means a
18 state-supported scholarship, grant, tuition waiver, or tuition reimbursement
19 funded with state funds or net proceeds from the state lottery awarded by:
20 (A) The Department of Higher Education; or
21 (B) A scholarship or grant awarded by an institution of
22 higher education in this state in whole or in part by state funds, including
23 without limitation:
24 (i) Scholarships awarded on the basis of entrance
25 exam scores or high school academic achievement;
26 (ii) Tuition waivers based on age, military service,
27 occupation, or other factors;
28 (iii) Out-of-state tuition waivers for undergraduate
29 students from contiguous states in close proximity to a college or
30 university;
31 (iv) Scholarships for transfers from two-year
32 institutions;
33 (v) Performance scholarships for band, musical
34 performing groups, arts, theater, forensics, and similar activities that are
35 not awarded on the basis of entrance exam scores or high school academic
36 achievement; and

4 02-04-2010 17:10 CLR305

 HCR1006

1 (vi) Any other publicly funded program under which

2 students are not charged or are reimbursed by the institution of higher
3 education for tuition, fees, books, or other costs of attendance; and
4 (19)(A) "Supplant" means that the net proceeds from the state
5 lottery are used in place of, not in addition to, state nonlottery
6 educational resources provided for state-supported student financial
7 assistance for a specified fiscal year.
8 (B) Supplanting does not occur if the General Assembly provided
9 the state nonlottery educational resources as if the lotteries under 23-
10 115-101 et seq. do not exist; and
11 (17)(20)(A) Traditional student means a student who, beginning
12 with the 2010-2011 academic year, will enter postsecondary education as a
13 full-time first-time freshman within twelve (12) months after graduating from
14 high school and remains continuously enrolled as a full-time student.
15 (B) Traditional student does not include a current
16 achiever student.
17
18 SECTION 2. Arkansas Code 6-85-205(a)(2), concerning the duties of
19 the Department of Higher Education, is amended to read as follows:
20 (2) At least ten (10) business days before the date the
21 Department of Higher Education files with the Bureau of Legislative Research
22 under 25-15-204 The Arkansas Lottery Commission Legislative Oversight
23 Committee shall perform the function of the Legislative Council required by
24 law for the review of a proposed rule or proposed change to a rule
25 promulgated by the Department of Higher Education under this subchapter, the
26 Department of Higher Education shall file a copy of the proposed rule or
27 proposed change to a rule with the Arkansas Lottery Commission Legislative
28 Oversight Committee.
29
30 SECTION 3. Arkansas Code 6-85-205(d), concerning the duties of the
31 Department of Higher Education, is amended to read as follows:
32 (d)(1) The Department of Education and the Department of Higher
33 Education are directed to develop appropriate informational materials on the
34 Arkansas Academic Challenge Scholarship Program and to ensure distribution of
35 the materials to Arkansas students in grade seven through grade twelve (7-12)
36 each year as a part of the packet of materials on precollegiate preparation

5 02-04-2010 17:10 CLR305

 HCR1006

1 distributed by the Department of Education as required by 6-61-217 Arkansas

2 Higher Education Coordinating Board under 6-61-217 and by the Department of
3 Education under the Higher Education Awareness Act of 1993, 6-5-401 et seq.
4 (2) The distribution of informational materials under this
5 section shall be accomplished through the collaboration of school counselors
6 and other appropriate public school or Department of Higher Education
7 personnel.
8 (3) The Department of Higher Education shall provide a copy of
9 the informational materials developed under this section to the Arkansas
10 Lottery Commission Legislative Oversight Committee for its review.
11
12 SECTION 4. Arkansas Code 6-85-205(g), concerning the duties of the
13 Department of Higher Education, is amended to read as follows:
14 (g)(l)(A) The By July 15 of each year, the Director of the Department
15 of Higher Education shall provide a report to the General Assembly annually
16 regarding Arkansas Lottery Commission Legislative Oversight Committee on:
17 (i) theThe implementation of this subchapter;
18 (ii) The number of recipients that either:
19 (a) Dropped out during the academic year; or
20 (b) Lost the scholarship during the academic
21 year; and
22 (iii) Any additional information requested by the
23 committee.
24 (B) The committee shall include the information reported
25 under this subsection (g) in its annual report to the General Assembly under
26 6-85-220.
27
28 SECTION 5. Arkansas Code 6-85-206(1), concerning basic eligibility
29 requirements for the Arkansas Academic Challenge Scholarship Program - Part
30 2, is amended to read as follows:
31 (1)(A) The applicant has been an Arkansas resident for at least
32 the twelve (12) months immediately preceding the date the applicant will
33 enroll in an approved institution of higher education, and.
34 (B) if If the applicant is less than eighteen (18) twenty-
35 one (21) years of age, either the applicant or a parent or guardian of the
36 applicant or a combination of the applicant and a parent or guardian of the

6 02-04-2010 17:10 CLR305

 HCR1006

1 applicant has shall have maintained Arkansas residency for the same period of
2 time at least the twelve (12) months immediately preceding the date the
3 applicant will enroll in an approved institution of higher education.
4 (B)(C)(i) To be considered an Arkansas resident, an
5 applicant shall demonstrate residency by evidence deemed sufficient to the
6 Department of Higher Education,.
7 (ii) Evidence of residency may include including
8 without limitation information provided by the applicant on the Free
9 Application for Federal Student Aid or a subsequent application required by
10 the United States Department of Education for federal financial aid;
11
12 SECTION 6. Arkansas Code 6-85-207(2), concerning eligibility
13 requirements of traditional students for the Arkansas Academic Challenge
14 Scholarship Program - Part 2, is amended to read as follows:
15 (2) Graduated from an Arkansas public high school that in the
16 year of the applicant's graduation is annually identified in the report by
17 the Department of Education under 6-15-421 as a school in which twenty
18 percent (20%) or more of the students received a letter grade of "B" or
19 higher but did not score proficiency or higher on the state-mandated end-of-
20 course assessment for the related course on the first attempt, achieved a
21 high school grade point average of at least 2.5, and:
22 (A) Completed the Smart Core curriculum if graduating from
23 an Arkansas high school in the 2013-2014 school year or later; and
24 (B) Either:
25 (i) Has a minimum composite score of nineteen (19)
26 on the ACT or the equivalent score on an ACT equivalent; or
27 (ii) Scores proficient or higher on all state-
28 mandated end-of-course assessments, including without limitation end-of-
29 course assessments on:
30 (a) Algebra I;
31 (b) Geometry;
32 (c) Biology; and
33 (d) Beginning with the 2013-2014 school year,
34 literacy; or
35
36 SECTION 7. Arkansas Code 6-85-208 is amended to read as follows:

7 02-04-2010 17:10 CLR305

 HCR1006

1 6-85-208. Additional eligibility requirements for a nontraditional

2 student.
3 (a) An applicant is eligible as a nontraditional student if, in
4 addition to the requirements of 6-85-206, the applicant:
5 (1) Graduated from an Arkansas public high school and achieved a
6 2.5 high school grade point average;
7 (2) Had a minimum composite score of nineteen (19) on the ACT or
8 the equivalent score on an ACT equivalent; or
9 (3)(A) Has completed at least twelve (12) semester hours of
10 courses granting three (3) or more hours of credit per course at an approved
11 institution of higher education and earned a postsecondary grade point
12 average of at least 2.5.
13 (B) A course granting less than three (3) hours of credit
14 may be counted toward the twelve (12) semester hours under this subdivision
15 (a)(3) if it is related to a credit course required for a degree.
16 (b) To be eligible, a nontraditional student applicant who graduated
17 from a private high school, an out-of-state high school, or a home school
18 high school, or who obtained a General Educational Development certificate
19 shall have achieved a minimum composite score of nineteen (19) on the ACT or
20 the equivalent score on an ACT equivalent.
21
22 SECTION 8. Arkansas Code 6-85-209, is amended to read as follows:
23 6-85-209. Additional eligibility requirements for a student near
24 completion current achiever student.
25 (a) In addition to the requirements of 6-85-206, an applicant is
26 eligible as a student near completion if at the time of applying for the
27 scholarship current achiever student if the applicant:
28 (1) Is enrolled in a two-year or four-year approved institution
29 of higher education; Entered postsecondary education before the 2010-2011
30 academic year:
31 (A) As a full-time first-time freshman student; and
32 (B) Within twelve (12) months after graduating high
33 school; and
34 (2) Is within twenty-five percent (25%) of the requirements for
35 completion of an associate degree or baccalaureate degree At the time of
36 applying for the scholarship:

8 02-04-2010 17:10 CLR305

 HCR1006

1 (A) Has been continuously enrolled at an institution of

2 higher education as a full-time student;
3 (B)(i) Has completed at least twelve (12) semester hours of
4 courses granting three (3) or more hours of credit per course at an approved
5 institution of higher education.
6 (ii) A course granting less than three (3)
7 hours of credit may be counted toward the twelve (12) semester hours under
8 this subdivision (a)(2) if it is related to a credit course required for a
9 degree; and
10 (3)(C) Has achieved a postsecondary grade point average of
11 at least 2.5.
12
13 SECTION 9. Arkansas Code 6-85-210(b)(2)(C), concerning continuing
14 eligibility for the Arkansas Academic Scholarship Program - Part 2, is
15 amended to read as follows:
16 (C)(i) A traditional student recipient is continuously enrolled
17 in an approved institution of higher education if he or she completes twenty-
18 seven (27) semester hours in the first year as a recipient and completes
19 thirty (30) semester hours each academic year thereafter.
20 (ii) A nontraditional student recipient is
21 continuously enrolled if he or she maintains at an approved institution of
22 higher education in consecutive semesters, not including any summer term:
23 (a) Full-time enrollment if the student
24 receives a scholarship under this subchapter for a full-time student; or
25 (b) Part-time enrollment if the student is
26 receiving a scholarship under this subchapter for a part-time student;
27 (3) A recipient who enrolls in one (1) or more remedial
28 courses shall complete all remedial courses required by the approved
29 institution of higher education by the time the student completes the first
30 thirty (30) semester hours attempted after receiving the scholarship;
31 (4) A recipient shall earn a postsecondary grade point
32 average of 2.5 or higher at an approved institution of higher education;
33 (5) A recipient shall enroll in courses that lead toward a
34 baccalaureate degree program after attempting the lesser of:
35 (A) Sixty-six (66) semester hours; or
36 (B) The completion of an associate degree program,

9 02-04-2010 17:10 CLR305

 HCR1006

1 unless the number of hours required to complete the associate degree program
2 exceeds sixty-six (66) semester hours, in which case the higher number of
3 hours for completion shall be used for this subdivision (b)(5); and
4 (6) A recipient shall meet any other continuing
5 eligibility criteria established by the Department of Higher Education
6 (C) A recipient is continuously enrolled at an approved
7 institution of higher education.
8
9 SECTION 10. Arkansas Code 6-85-210(c)(1), concerning continuing
10 eligibility for the Arkansas Academic Scholarship Program Part 2, is
11 amended to read as follows:
12 (c)(1) If a recipient becomes ineligible for the scholarship because
13 the recipient's postsecondary grade point average or number of completed
14 credit hours no longer meets the minimum requirement for the scholarship, the
15 recipient may regain eligibility under this subsection (c) one (1) time only
16 in an academic year.
17
18 SECTION 11. Arkansas Code 6-85-212 (c), concerning scholarship award
19 amounts, is amended to read as follows:
20 (c) It is the General Assembly's intent that before increasing award
21 amounts for scholarships under this subchapter, the number of scholarships
22 awarded to nontraditional students under 6-85-208 and to students near
23 completion under 6-85-209 be increased.
24
25 SECTION 12. Arkansas Code 6-85-212 (e)(1) and (2), concerning
26 scholarship award amounts, is amended to read as follows:
27 (e)(1)(A) For the 2010-2011 academic year, the General Assembly shall
28 determine the scholarship award amount by February 28, 2010, based on the
29 amount of net proceeds from the state lottery reasonably projected to be
30 available for scholarships in the 2010-2011 academic year The scholarship
31 award amount under this subchapter for an academic year for a full-time
32 recipient enrolled in a four-year approved institution of higher education is
33 five thousand dollars ($5,000).
34 (B) The Department of Higher Education shall award an
35 aggregate amount of scholarship awards to current achiever students beginning
36 with the 2010-2011 academic year of up to forty-one million five hundred

10 02-04-2010 17:10 CLR305

 HCR1006

1 thousand dollars ($41,500,000).

2 (C) After deducting the amount committed for current
3 achiever student scholarships from the amount available under subdivision
4 (e)(1)(B) of this section, the department shall use the balance to fund
5 scholarships to nontraditional students under this subchapter.
6 (2)(A) The Department of Higher Education department shall award
7 an aggregate amount of scholarship awards to nontraditional students
8 beginning with the 2010-2011 academic year up to of at least eight million
9 dollars ($8,000,000).
10 (B)(i) The department shall return to the Arkansas Lottery
11 Commission the excess funding, if any, for scholarship awards the department
12 received under 23-115-801.
13 (ii) The commission shall deposit any funds
14 received from the department under this subdivision (e)(2)(B) into a trust
15 account established under 23-115-801(b).
16 (C) Priority for scholarships awarded to nontraditional
17 students and current achiever students is based on the applicant's level of
18 progress toward completion of a certificate, an associate degree, nursing
19 diploma, or a baccalaureate degree, or on other criteria established by the
20 department.
21
22 SECTION 13. Arkansas Code 6-85-212(f)-(j)(1), concerning scholarship
23 award amounts, is amended to read as follows:
24 (f)(1) By November 1 of each year, the Arkansas Lottery Commission
25 Legislative Oversight Committee shall provide to the General Assembly its
26 recommendations for any changes to the:
27 (A)(1) Award amounts;
28 (B)(2) Number or type of scholarships; and
29 (C)(3) Eligibility requirements.
30 (2) The committee may base its recommendations for scholarship
31 award amounts on the following guidelines and any additional information the
32 committee finds relevant to making the recommendations:
33
34 Annual 2-yr Annual 4-yr If net lottery
35 Institution institution proceeds are
36 award amount award amount greater than Or equal to

11 02-04-2010 17:10 CLR305

 HCR1006

1 $1,250 $2,500 $ 49,308,626 $ 60,405,551

2 $1,500 $3,000 $ 60,405,551 $ 71,502,476
3 $1,750 $3,500 $ 71,502,476 $ 82,599,401
4 $2,000 $4,000 $ 82,599,401 $ 93,696,326
5 $2,250 $4,500 $93,696,326 $104,793,251
6 $2,500 $5,000 $104,793,251 $115,890,177
7 $2,750 $5,500 $115,890,177 $126,987,102
8 $3,000 $6,000 $126,987,102
9
10 (g) After the 2010-2011 academic year, the determination of the amount
11 of net proceeds from the state lottery available for each semester is based
12 on the commission's certification of net proceeds.
13 (h)(g) The department shall ensure that It is the intent of the
14 General Assembly that in determining award amounts under this subchapter the
15 General Assembly will consider whether sufficient funds remain will be
16 available to pay for scholarship awards through the anticipated completion of
17 the degree or certificate a recipient is seeking and report the balance of
18 those funds to the General Assembly before the amount of awards under this
19 subchapter are increased by the General Assembly.
20 (i)(h) All awards under this subchapter are subject to the prohibition
21 under 6-80-105 against using public funds in a student financial package in
22 excess of the recognized cost of attendance at the institution where the
23 student is enrolled.
24 (j)(1)(i)(1) If the department has less than a sufficient amount from
25 net proceeds from the state lottery to provide for the scholarship
26 commitments under this subchapter, the department first shall use the
27 department's funds from any Scholarships and Grants Contingency Appropriation
28 made to the department to fund the shortfall before requesting funds from the
29 Scholarship Shortfall Reserve Trust Account under 23-115-802.
30
31 SECTION 14. Arkansas Code 6-85-215(a), concerning the release of
32 student information, is amended to read as follows:
33 (a)(1)(A) A student receiving any state-supported student financial
34 assistance for which an institution of higher education is required to
35 provide information under this section shall complete and sign a consent form
36 authorizing the release of or refusing to authorize:

12 02-04-2010 17:10 CLR305

 HCR1006

1 (i) the The institution of higher education to

2 release the student's individual personal information to the Bureau of
3 Legislative Research and authorizing:;
4 (i)(ii) The institution of higher education to
5 provide the bureau with academic progress information for the scholarship
6 recipient; and
7 (ii)(iii) The department Department of Higher
8 Education to release the student's individual personal information to the
9 bureau.
10 (B) If a student is less than eighteen (18) years of age,
11 the student's parent or guardian shall complete and sign the consent form.
12 (2)(A) The student may opt out of the release of information. A
13 decision to opt out applies only to refuse to authorize the release of
14 information under this section and does not apply to nonindividually
15 identifiable information released under any other section of this subchapter
16 or under any other law.
17 (B) In order to provide better statistical data, each
18 institution shall report the number of students who opt out refuse to
19 authorize the release of information.
20 (3)(A) Before any state funds for state-supported student
21 financial assistance are released on behalf of a student, the form signed by
22 the student or the students parent or guardian indicating either the
23 students authorization to release or the refusal to authorize the release of
24 information under this section shall be obtained by:
25 (i) The department if the department awards the
26 state-supported student financial assistance; or
27 (ii) The institution of higher education if the
28 state-supported student financial assistance is awarded solely by the
29 institution.
30 (B) The consent form shall state that:
31 (A)(i) The purpose for the bureau's collecting data
32 is to guide the General Assembly's evaluation of the need for adjustments to
33 scholarship program eligibility and funding levels; and
34 (B) Personally identifiable student data will not be
35 released by the bureau or the department; and
36 (C)(ii) The student may opt out of the release of

13 02-04-2010 17:10 CLR305

 HCR1006

1 information, and that opting out A refusal to authorize the release of

2 information under this section will not affect the student's eligibility for
3 a scholarship.
4 (C) A high school student enrolled in a course for
5 concurrent credit is exempt under this section.
6 (4) The form shall list the categories of information authorized
7 for release under this section.
8 (5) The Director of the Bureau of Legislative Research may:
9 (A) Seek an opinion from the Family Policy Compliance
10 Office of the United States Department of Education concerning the student
11 consent requirement and opt out to authorize or refuse to authorize the
12 release of information under this section; or
13 (B) Request the Department of Higher Education to seek the
14 opinion on behalf of the bureau.
15
16 SECTION 15. Arkansas Code 6-85-217(b)(3)(A), concerning the
17 confidentiality of student data to be provided to the Bureau of Legislative
18 Research, is amended to read as follows:
19 (3)(A) The Director of the Bureau of Legislative Research may
20 seek an opinion from Family Policy Compliance Office of the United States
21 Department of Education concerning the department's Department of Higher
22 Educations system, any proposed modification of the system, or any request
23 for information made by the bureau under this section.
24
25 SECTION 16. Arkansas Code 6-85-217(f), concerning the use of student
26 data, is amended to read as follows:
27 (f) The bureau's staff shall inform the Department of Higher Education
28 of any data used in the preparation of reports and provide the department
29 Department of Higher Education at least two (2) working days to review any
30 student-related data used in preparation of reports before publicly releasing
31 that student-related data without personally identifiable student data.
32
33 SECTION 17. Arkansas Code 6-85-218 is repealed.
34 6-85-218. Advisory council.
35 (a) An advisory council is created to provide recommendations to the
36 Department of Higher Education and the Arkansas Lottery Commission

14 02-04-2010 17:10 CLR305

 HCR1006

1 Legislative Oversight Committee for the implementation of this subchapter.

2 (b) The advisory council shall be composed of sixteen (16) members as
3 follows:
4 (1) The Director of the Department of Higher Education, or his
5 or her designee;
6 (2) The Commissioner of Education, or his or her designee;
7 (3) The Executive Director of the Arkansas Association of
8 Educational Administrators, or his or her designee;
9 (4) The Executive Director of the Arkansas Education
10 Association, or his or her designee;
11 (5) The Executive Director of the Arkansas School Boards
12 Association, or his or her designee;
13 (6) The Director of the Bureau of Legislative Research, or his
14 or her designee, who shall serve as an ex officio nonvoting member; and
15 (7)(A) Ten (10) members who shall serve three-year terms,
16 selected as follows:
17 (i) One (1) member of the House of Representatives
18 selected by the Speaker of the House of Representatives;
19 (ii) One (1) member of the Senate selected by the
20 President Pro Tempore of the Senate;
21 (iii) Two (2) members selected by the Director of
22 the Department of Higher Education who are employed at the department;
23 (iv) Two (2) members selected by the Director of the
24 Department of Higher Education who are presidents or chancellors of two-year
25 approved institutions of higher education, or the designee of the president
26 selected;
27 (v) Two (2) members selected by the Director of the
28 Department of Higher Education who are presidents or chancellors of four-year
29 approved institutions of higher education or the designee of the president or
30 chancellor selected;
31 (vi) One (1) member selected by the Director of the
32 Department of Higher Education who is a financial aid administrator at an
33 approved institution of higher education, or his or her designee; and
34 (vii) One (1) member selected by the Director of the
35 Department of Higher Education who is a student services administrator at an
36 approved institution of higher education, or his or her designee.

15 02-04-2010 17:10 CLR305

 HCR1006

1 (B) Members appointed under this subdivision (b)(7):

2 (i) Shall have initial terms that are staggered
3 evenly between two (2) and three (3) years as determined by lot at the
4 advisory council's first meeting; and
5 (ii) May be reappointed to successive terms.
6 (C) A vacancy under this subdivision (b)(7) shall be
7 filled by appointment by the appointing authority effective until the
8 expiration of the regular term.
9 (c) The advisory council shall be staffed by the department.
10 (d) The legislator members of the advisory council shall serve as
11 cochairs of the advisory council and shall call meetings as needed to fulfill
12 the purpose of the advisory council.
13 (e)(1) Legislative members are entitled to reimbursement for expenses
14 and per diem at the same rate and from the same source as provided by law for
15 members of the General Assembly attending meetings of interim committees.
16 (2) Nonlegislative members of the advisory council shall serve
17 without compensation but may be reimbursed by the department for reasonable
18 travel expenses incurred to attend meetings if funding is available.
19 (f) By August 1, 2009, and as requested thereafter, the advisory
20 council shall report its recommendations to the Arkansas Lottery Commission
21 Legislative Oversight Committee.
22
23 SECTION 18. Arkansas Code 6-80-105 is amended to read as follows:
24 6-80-105. Student financial aid Antistacking Scholarship stacking.
25 (a) As used in this section:
26 (1) "Federal aid" means scholarships or grants awarded to a
27 student as a result of the Free Application for Federal Student Aid,
28 excluding the Pell grant;
29 (2) "Other aid" means scholarships, grants, tuition waivers, or
30 housing waivers awarded to a student from postsecondary institutions or
31 private sources; and
32 (3) "State aid" means scholarships or grants awarded to a
33 student from public funds, including without limitation the Arkansas Academic
34 Challenge Scholarship under 6-85-201 et seq., the Department of Higher
35 Education scholarship and grant programs, state general revenues, tuition,
36 and local tax revenue; and

16 02-04-2010 17:10 CLR305

 HCR1006

1 (4) "Student aid package" means federal aid, state aid, and
2 other aid a student receives for postsecondary education expenses.
3 (a)(b)(1) No A postsecondary institution shall use public funds not
4 award state aid in a student aid package which exceeds in excess of the
5 recognized cost of attendance at the institution where the student enrolls.
6 (2) Public funds are defined to include Department of Higher
7 Education scholarships and grants, state general revenues, tuition, or local
8 tax revenue For the purpose of stacking scholarships in a student's student
9 aid package, the Arkansas Academic Challenge Scholarship under 6-85-201 et
10 seq. shall be reduced or returned first.
11 (b)(c) All A postsecondary institutions institution shall report to
12 the department Department of Higher Education the total amount of financial
13 federal aid, state aid, and other aid from all sources for any a student who
14 receives if the student receives an award from a department scholarship or
15 grant program, including the Arkansas Academic Challenge Scholarship under
16 6-85-201, et. seq.
17 (c)(1)(d)(1) When a student receives a total student aid package that
18 includes public funds state aid and the student aid package exceeds the cost
19 of attendance, the postsecondary institution shall repay public funds state
20 aid in the amount exceeding the total cost of attendance, starting with state
21 aid received under the Arkansas Academic Challenge Scholarship under 6-85-
22 201 et seq.
23 (2) Such The department shall credit the excess state aid funds
24 repaid shall be credited to the Higher Education Grants Fund Account
25 appropriate department fund or trust account.
26
27 SECTION 19. Section 7 of Acts 605 and 606 of 2009, as amended by Act
28 1405 of 2009, is repealed:
29 (a) The Director of the Department of Higher Education shall determine
30 the amount of excess net proceeds from the state lottery by calculating the
31 difference between:
32 (1) The amount committed to scholarships awarded under the
33 Academic Challenge Scholarship Program Part 1 and the scholarships for
34 traditional students and nontraditional students under the Academic Challenge
35 Scholarship Program Part 2; and
36 (2) The amount of net proceeds from the state lottery reasonably

17 02-04-2010 17:10 CLR305

 HCR1006

1 projected for the 2010-2011 academic year as determined by the director

2 after consultation with the Arkansas Lottery Commission, the Legislative
3 Oversight Committee, the House Committee on Education, and the Senate
4 Committee on Education.
5 (b) The amount of excess net proceeds from the state lottery shall
6 only be available for one (1) or more of the following:
7 (1) Awarding scholarships to students near completion;
8 (2) Increasing state-supported student financial assistance
9 under the Higher Education Opportunities Grant Program, 6-82-1701 et seq.
10 and the Arkansas Workforce Improvement Grant Program, 6-82-1601 et seq., or
11 other state-supported student financial assistance programs for
12 nontraditional students; or
13 (3) Establishing a reserve fund.
14 (c) By July 15, 2010, the Director of the Department of Higher
15 Education shall prepare a report on the projected distribution of excess net
16 proceeds from the state lottery based on:
17 (1) The award amounts set by the General Assembly in February
18 2010 under this act;
19 (2) The amount of excess net proceeds from the state lottery
20 reasonably projected to be available for funding scholarships under this act;
21 (3) The number of applications accepted for the 2010-2011
22 academic year under this act;
23 (4) The number of applicants on the waiting lists for
24 scholarships to be awarded under this act;
25 (5) Of the applicants on the waiting list, whether the
26 applicants are traditional students, nontraditional students, or students
27 near completion;
28 (d) The director shall provide the report to the Arkansas Lottery
29 Commission Legislative Oversight Committee, the House Committee on Education,
30 and the Senate Committee on Education for review.
31 (e)(1) The department shall maintain a list of nontraditional students
32 and students near completion and shall award scholarships under this
33 subchapter first in order of those nearest completion.
34 (2) The amount of the award per student per year shall be
35 determined by dividing the number of hours until completion by thirty (30)
36 and multiplying by the amount the legislature sets for the award for

18 02-04-2010 17:10 CLR305

 HCR1006

1 baccalaureate students.
2 (3) The amount of the award for associate degree students shall
3 be determined by dividing the number of hours until completion by fifteen
4 (15) and multiplying by the amount the legislature sets for two-year
5 students.
6
7 SECTION 20. Arkansas Code 23-115-103(7), concerning the definition
8 of immediate family as used in the Arkansas Scholarship Lottery Act, is
9 amended to read as follows:
10 (7) Immediate family means the father, mother, sister,
11 brother, husband, wife, child, grandmother, grandfather, grandchild, father-
12 in-law, mother-in-law, sister-in-law, brother-in-law, daughter-in-law, son-
13 in-law, stepchild, grandmother-in-law, grandfather-in-law, stepgrandchild, or
14 any individual acting as parent or guardian;
15
16 SECTION 21. Arkansas Code 23-115-103(12)(B), concerning the
17 definition of lottery as used in the Arkansas Scholarship Lottery Act, is
18 amended to read as follows:
19 (B) Lottery includes without limitation:
20 (i) An instant ticket;
21 (ii) A draw game; and
22 (iii) Participation in a multistate or
23 multisovereign game; and
24 (iv) A raffle.
25
26 SECTION 22. Arkansas Code 23-115-103(13), concerning the definition
27 of lottery proceeds, is amended to read as follows:
28 (13) Lottery proceeds means all revenue derived from the sale
29 of tickets or shares and all other moneys derived from or in connection with
30 the operation of a lottery, including without limitation fees, offsets,
31 reimbursements, insurance proceeds, damages, and liquidated damages collected
32 or imposed by the Arkansas Lottery Commission under this chapter;
33
34 SECTION 23. Arkansas Code 23-115-103(19)(J) - (K), concerning the
35 definition of operating expenses of the Arkansas Lottery Commission, is
36 amended to add an additional subdivision to read as follows:

19 02-04-2010 17:10 CLR305

 HCR1006

1 (J) Amounts annually transferred to a fidelity fund under 23-

2 115-603; and
3 (K) Amounts paid to governmental entities for goods or services
4 provided to the Arkansas Lottery Commission, including without limitation
5 services provided by the Division of Legislative Audit, the Department of
6 Human Services, and the Department of Finance and Administration; and
7 (L) Withholding and payment of income taxes from lottery prizes.
8
9 SECTION 24. Arkansas Code 23-115-205(25)(C) and (26), concerning the
10 powers of the Arkansas Lottery Commission, is amended to add an additional
11 subdivision to read as follows:
12 (C) An independent testing laboratory shall not be owned
13 or controlled by a vendor or a retailer; and
14 (26) To withhold state and federal income taxes as required by
15 law; and
16 (27) To adopt and amend rules necessary to carry out and
17 implement its powers and duties, organize and operate the commission,
18 regulate the conduct of lotteries in general, and any other matters necessary
19 or desirable for the efficient and effective operation of lotteries for the
20 convenience of the public.
21
22 SECTION 25. Arkansas Code 23-115-211 is amended to read as follows:
23 23-115-211. Certain sections inapplicable.
24 The In addition to any provision of law expressly exempting the
25 Arkansas Lottery Commission, the following sections shall not apply to the
26 Arkansas Lottery Commission commission:
27 (1) Section 19-1-211;
28 (2) Section 19-1-301 et seq.;
29 (3) Section 19-1-609;
30 (4) Section 19-4-1802;
31 (5) Section 19-5-206;
32 (6) Section 19-11-301 et seq;
33 (7) Section 22-9-103;
34 (8) Section 22-9-104;
35 (9) Section 25-1-104; and
36 (10) Section 25-26-201 et seq.; and

20 02-04-2010 17:10 CLR305

 HCR1006

1 (11)(10) Section 25-27-104.

2
3 SECTION 26. Arkansas Code 23-115-302(b)(8) and (9), concerning the
4 duties of the Director of the Arkansas Lottery Commission, is amended to read
5 as follows:
6 (8) Report monthly to the commission and the Arkansas Lottery
7 Commission Legislative Oversight Committee a complete statement of lottery
8 revenues and expenses for the preceding month and an accompanying statement
9 of net assets; and
10 (9) By August 15, 2011, and annually thereafter, report to the
11 committee the following:
12 (A) For the immediately preceding fiscal year:
13 (i) The total amount of net proceeds from the state
14 lottery; and
15 (ii) The amounts deposited into and disbursed from
16 the Scholarship Shortfall Reserve Trust Account under 23-115-802; and
17 (B) The commission's projection for net proceeds from the
18 state lottery for the current fiscal year; and
19 (10) Perform other duties generally associated with a director
20 of a commission of an entrepreneurial nature.
21
22 SECTION 27. Arkansas Code 23-115-306(b), concerning special salary
23 allowances for employees of the Arkansas Lottery Commission, is amended to
24 read as follows:
25 (b) The total compensation for For a position subject to an a special
26 allowance under subsection (a) of this section, including the sum of the
27 salary authorized by the General Assembly and a the special salary allowance,
28 shall not exceed an amount equal to two and one-half (2) times the salary
29 for the position authorized by the General Assembly.
30
31 SECTION 28. Arkansas Code 23-115-403(g), concerning unclaimed
32 lottery prizes, is amended to read as follows:
33 (g)(1) Unclaimed lottery prize money is not shall be added to net
34 lottery proceeds.
35 (2)(A) An annual amount of at least two hundred thousand dollars
36 ($200,000) shall be directed to the Department of Health for the treatment of

21 02-04-2010 17:10 CLR305

 HCR1006

1 compulsive gambling disorder and educational programs related to compulsive

2 gambling disorder.
3 (B) As part of its regulation of public health, the State
4 Board of Health may promulgate rules to implement subdivision (g)(2)(A) of
5 this section, including without limitation the creation of:
6 (i) Programs for the treatment of compulsive
7 gambling disorder; and
8 (ii) Educational programs related to compulsive
9 gambling disorder.
10 (3) Unclaimed lottery prize money remaining after the payment
11 under subdivision (g)(2) of this section shall be:
12 (A) Added to the pool from which future lottery prizes are
13 to be awarded; or
14 (B) Used for special lottery prize promotions.
15
16 SECTION 29. Arkansas Code Title 23, Chapter 115, Subchapter 4, is
17 amended to add an additional section to read as follows:
18 23-115-410. Compulsive gambling disorder treatment and educational
19 programs.
20 (a) The Arkansas Lottery Commission shall provide an annual amount of
21 at least two hundred thousand dollars ($200,000) for:
22 (1) Compulsive gambling disorder treatment programs; and
23 (2) Compulsive gambling disorder educational programs.
24 (b)(1) The commission shall work together with the Department of Human
25 Services to implement the compulsive gambling disorder treatment programs and
26 the compulsive gambling disorder educational programs under this section.
27 (2) The commission may contract with the department for
28 providing all services related to and administration of the compulsive
29 gambling disorder treatment programs and the compulsive gambling disorder
30 educational programs.
31 (3) The department may promulgate rules to administer the
32 compulsive gambling disorder treatment programs and the compulsive gambling
33 disorder educational programs.
34
35 SECTION 30. Arkansas Code 23-115-601(f)(5)(B)(v), concerning the
36 qualifications of lottery retailers, is amended to read as follows:

22 02-04-2010 17:10 CLR305

 HCR1006

1 (v) Is a member of the commission, or a member of

2 the immediate family of a member of the commission;
3
4 SECTION 31. Arkansas Code 23-115-701(e), concerning major
5 procurement contracts of the Arkansas Lottery Commission, is amended to read
6 as follows:
7 (e)(1) Each proposed major procurement contract and each
8 amendment or modification to a proposed or executed major procurement
9 contract shall be filed with the Arkansas Lottery Commission Legislative
10 Oversight Committee for review at least thirty (30) days before the execution
11 date of the major procurement contract or the amendment or modification to a
12 proposed or executed major procurement contract.
13 (2) The Arkansas Lottery Commission Legislative Oversight
14 Committee shall provide the commission with its review as to the propriety of
15 the major procurement contract and each amendment or modification to a
16 proposed or executed major procurement contract within thirty (30) days after
17 receipt of the proposed major procurement contract or the amendment or
18 modification to a proposed or executed major procurement contract.
19
20 SECTION 32. Arkansas Code 23-115-801(c)(1), concerning the use of
21 net proceeds from the state lottery, is amended to read as follows:
22 (c)(1) The Director of the Department of Higher Education shall
23 certify to the commission the amount of net proceeds from the lottery needed
24 to:
25 (A) Fund fund the scholarships awarded to recipients under
26 6-85-201 et seq. for each semester of an academic year; and
27 (B) Ensure that sufficient funds remain available to pay
28 for scholarship awards for the recipients through the anticipated completion
29 of the degree or certificate a recipient is seeking.
30
31 SECTION 33. Arkansas Code 23-115-802(b)(3), concerning the Shortfall
32 Reserve Trust Account of the Arkansas Lottery Commission, is amended to read
33 as follows:
34 (3) Any amount in the trust fund account exceeding twenty million
35 dollars ($20,000,000) shall be considered net proceeds and shall be deposited
36 annually into one (1) or more trust accounts at one (1) or more financial

23 02-04-2010 17:10 CLR305

 HCR1006

1 institutions by July 1 of each year.

2
3 SECTION 34. Arkansas Code 23-115-802(c), concerning the Shortfall
4 Reserve Trust Account of the Arkansas Lottery Commission, is amended to read
5 as follows:
6 (c)(1) If net proceeds in any year are not sufficient to meet the
7 amount allocated for higher education scholarships, the account may be drawn
8 upon to meet the deficiency.
9 (2) If it becomes necessary to draw from the account in any
10 fiscal year, the Department of Higher Education shall review the scholarship
11 and grant program and shall reduce the program to accommodate available
12 lottery proceeds, exclusive of the account.
13
14 SECTION 35. Arkansas Code 23-115-1101(f)(3), concerning the Arkansas
15 Lottery Commission Legislative Oversight Committee, is amended to read as
16 follows:
17 (3) Six (6) members A majority of the Arkansas Lottery
18 Commission Legislative Oversight Committee constitute constitutes a quorum.
19
20 SECTION 36. Arkansas Code 23-115-1102(c), concerning the duties of
21 the Arkansas Lottery Commission Legislative Oversight Committee, is amended
22 to read as follows:
23 (c)(1) The Arkansas Lottery Commission Legislative Oversight Committee
24 shall perform all duties or functions of the Legislative Council required by
25 law concerning the contracts, rules, reports, or other information filed with
26 the Arkansas Lottery Commission Legislative Oversight Committee under
27 subsection (b) of this section.
28 (2) The Bureau of Legislative Research shall provide staff for
29 the Arkansas Lottery Commission Legislative Oversight Committee.
30
31 SECTION 37. Arkansas Code Title 26, Chapter 51 is amended to add a new
32 subchapter to read as follows:
33 SUBCHAPTER 23 -- LOTTERY WITHHOLDING ACT
34 26-51-2301. Title.
35 This subchapter may be cited as the "Lottery Withholding Act".
36

24 02-04-2010 17:10 CLR305

 HCR1006

1 26-51-2302. Definitions.
2 As used in this subchapter:
3 (1) "Claim center" means a claim center established by the Arkansas
4 Lottery Commission under 23-115-207;
5 (2) "Lottery" means the same as defined in 23-115-103; and
6 (3) Lottery winnings means the proceeds of a lottery prize based on
7 the total amount paid from an Arkansas lottery or from a multistate or
8 multisovereign lottery without reduction for the amount paid for the lottery
9 ticket.
10
11 26-51-2303. Administration.
12 (a) This subchapter shall be administered in accordance with the
13 Arkansas Tax Procedure Act, 26-18-101 et seq.
14 (b) The Director of the Department of Finance and Administration shall
15 make and prescribe such rules, regulations, and forms as he or she deems
16 necessary to administer this subchapter.
17
18 26-51-2304. Amount deducted and withheld Credit.
19 (a) A claim center making a payment of lottery winnings on a single
20 lottery ticket of more than five thousand dollars ($5,000) shall deduct and
21 withhold an amount equal to seven percent (7%) of each payment of the lottery
22 winnings.
23 (b) The amount deducted and withheld under this section from any
24 lottery winnings paid to a person during the income year shall be credited
25 against the income tax liability of that person under the Income Tax Act of
26 1929, 26-51-101 et seq.
27
28 26-51-2305. Withholding return, reporting, and payment Lottery.
29 (a) A claim center shall register to withhold income tax under 26-
30 51-2304 from lottery winnings in the manner prescribed by the Director of the
31 Department of Finance and Administration.
32 (b) The withholding account used to report and remit the withholding
33 on wages shall not be used to report withholding on lottery winnings.
34 (c) A separate account for withholding on lottery winnings shall be
35 obtained from the Revenue Division of the Department of Finance and
36 Administration.

25 02-04-2010 17:10 CLR305

 HCR1006

1 (d) Each claim center shall file a monthly return and remit the income
2 tax withheld from lottery winnings on or before the fifteenth day of the
3 month following the month in which the income tax was withheld.
4 (e) A claim center shall keep the following records and information
5 for six (6) years after the date the income tax becomes due or is paid,
6 whichever is later:
7 (1) The total lottery winnings paid;
8 (2) The amount of lottery winnings income tax withheld and
9 remitted;
10 (3) The name, address, social security number or taxpayer
11 identification number, and amount of lottery winnings of each person in
12 receipt of lottery winnings; and
13 (4) The name, address, and taxpayer identification number of the
14 claim center.
15 (f)(1) A claim center shall provide two (2) copies of a statement to
16 each person who received lottery winnings and had an amount withheld under
17 26-51-2304 during the income year before January 31 following the close of
18 the income year.
19 (2) Each statement shall contain the following:
20 (A) The name, address, and social security number or
21 taxpayer identification number of the person in receipt of lottery winnings;
22 (B) The total amount of the lottery winnings subject to
23 withholding that was paid by the claim center to the recipient of the lottery
24 winnings for the income tax year;
25 (C) The total amount withheld from the recipient's lottery
26 winnings by the claim center under this subchapter for the income year;
27 (D) The name, address, and Arkansas identification number
28 of the claim center; and
29 (E) Such other information as the director shall require
30 by rule.
31
32 26-51-2306. Duties of the claim centers and payees.
33 (a)(1) The Arkansas Lottery Commission is liable for amounts required
34 to be deducted and withheld by a claim center under this subchapter
35 regardless of whether the amounts were in fact deducted or withheld.
36 (2) Any sum withheld in accordance with this subchapter is

26 02-04-2010 17:10 CLR305

 HCR1006

1 deemed to be held in trust for the State of Arkansas and shall be recorded by
2 the claim center in a ledger account so as to clearly indicate the amount of
3 income tax withheld and that the amount is the property of the State of
4 Arkansas.
5 (b) Each person that is subject to this subchapter and who is to
6 receive a payment of lottery winnings or is entitled to any portion of the
7 payment of lottery winnings shall furnish the claim center making the payment
8 a statement, made under penalty of perjury, containing his or her:
9 (1) Name;
10 (2) Address; and
11 (3) Social security number or taxpayer identification number."
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36

27 02-04-2010 17:10 CLR305